Ray v. Beussink & Hickam, P.C.
138 N.E.3d 19
Ill. App. Ct.2018Background
- Kerry Ray retired March 1, 2014 after nine months as interim police chief; his Police Pension Fund awarded benefits based on the higher interim-chief salary.
- The Illinois Department of Insurance audited the Fund and, on April 20, 2016, notified Ray the Fund had misapplied the rule requiring 12 months in the higher position, and reduced his pension by $4,000/year.
- Ray sued his accountant and the accounting firm for negligence/accounting malpractice, alleging they advised him the higher benefit and that he relied on that advice in retiring.
- Defendants moved to dismiss, arguing the Pension Fund lost jurisdiction to alter a final pension award after the 35-day Administrative Review Law period and that the Fund was a necessary party.
- The trial court denied dismissal, certified two Rule 308 questions (whether the Fund could reduce benefits two years after award; and whether Ray can maintain malpractice claims if the reduction was unlawful), and this court accepted the interlocutory appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a police pension board may reduce a final pension award based on a discovered mistake more than 35 days after the award | Ray implicitly: the Fund’s correction was proper under the statute permitting correction of mistakes | Defendants: the Fund was bound by the 35-day Administrative Review Law period and lost jurisdiction to modify the award after that time | Court: No. The award was final and the Fund lacked jurisdiction to change it after 35 days because the miscalculation was not the limited type of "error/mistake" that permits post-35-day corrections |
| Whether the Fund’s miscalculation qualifies as an "error" or "mistake" under section 3-144.2 allowing correction outside 35 days | Ray: (implied) the Payroll error justified correction | Defendants: the Fund’s change was a reinterpretation/misapplication, not a clerical/arithmetical error — so not an error under 3-144.2 | Court: The miscalculation was a misinterpretation (not a scrivener or simple arithmetic error) and thus not within 3-144.2’s exception; the Fund could not correct after 35 days |
| Whether the 2014 amendment to section 3-144.2 (defining "mistake") applies retroactively to this case | Ray: applied amended statute (as parties discussed) | Defendants: not retroactive or not applicable | Court: Amendment is prospective; legislature’s selective retroactivity language for related systems shows intent that this provision not apply retroactively to police funds lacking express retroactivity |
| Whether this court should decide the malpractice claim question certified (i.e., can Ray maintain malpractice suit if Fund’s reduction was unlawful) | Ray: malpractice claim can proceed if Fund’s reduction was improper | Defendants: malpractice claim fails because intervening Fund action broke causation or because Fund had authority | Court: Declined to answer — the second certified question raised factual issues (causation, scope of accountant’s conduct) inappropriate for a pure legal certified question; remanded for further proceedings |
Key Cases Cited
- Fredman Brothers Furniture Co. v. Department of Revenue, 109 Ill.2d 202 (1985) (Administrative Review Law procedures and strict 35-day jurisdictional rule).
- Rossler v. Morton Grove Police Pension Board, 178 Ill. App.3d 769 (1989) (distinguishing inadvertent arithmetical errors from broader miscalculations under section 3-144.2).
- Kosakowski v. Board of Trustees of the City of Calumet City Police Pension Fund, 389 Ill. App.3d 381 (2009) (reversal of pension reduction where Board’s reinterpretation of law did not constitute an "error" allowing reopening).
- Rutka v. Board of Trustees of the Cicero Police Pension Board, 405 Ill. App.3d 563 (2010) (final pension determinations terminate administrative proceedings and trigger review rules).
- Sola v. Roselle Police Pension Board, 342 Ill. App.3d 227 (2003) (finality of board action requires definitive action and notice to the applicant).